The Facts about Tuition Tax Credit Scholarships

The Facts about Tuition Tax Credit Scholarships

Some Oklahoma legislators are again trying to prioritize support for private schools instead of focusing on properly funding the public schools that serve nearly 700,000 Oklahoma children. Ask your legislators to reject the expansion of tuition tax credit scholarships and focus on properly funding public schools.

Bills of concern:

HB3450 by Rep. Kevin Calvey, R-Oklahoma City, would increase the tuition tax credit scholarship for married couples to $3,000 and raise the cap on tax credits to $5 million annually. The bill retains the $100,000 tax credit for corporations. It will be heard in committee at 10:30 a.m. Monday, Feb. 19.  Read more here.

 HB 3537 by Rep. Chad Caldwell, R- Enid, would effectively eliminate the cap on available tuition tax credits and lower the amount of scholarships that must go to children from low-income families. The bill retains the $100,000 tax credit for corporations. The bill will be heard at 4 p.m. Monday, Feb. 26, in the House Appropriations and Budget committee. Please ask members of the committee to vote NO.

Fiction:

Private school choice programs like tuition tax credit scholarships are focused on helping children from low-income families.

Families in tax credit scholarship programs can choose their child’s school.

Tuition tax credit scholarships improve student achievement.

Tuition tax credit scholarships help public schools.

Tuition tax credit scholarships are good for the state budget.

Fact:

A family of 4 earning up to $136,000 a year can receive a private school scholarship. That’s nearly triple the median Oklahoma household income.

The state’s largest scholarship-granting organization wants to lower the required percentage of donations they dedicate to serving children from low-income families.

The largest scholarship-granting organization has failed to meet the required percentage of donations dedicated to serving children from low-income families & instead wants to lower the requirement.

Tuition tax credits are tax cuts for corporations and the wealthy, shifting the burden of funding public education and other core state services to other taxpayers.

One scholarship-granting organization bragged the tax credits are “like a gift card from the state of Oklahoma.”

Redirecting resources to private schools erodes the ability of public schools to serve the 425,000 children from low-income families attending public schools.

The state is giving away millions of dollars in tax credits while the state aid formula is providing schools fewer dollars per student than in 2010. In 2016-2017, corporations received more than $2 million in tax credits for donating to private schools.

Private schools accepting tuition tax-credit scholarship students aren’t required to report any information about the achievement of scholarship students.

Private schools make the choice about which students they select. (Oklahoma Watch: Scholarship Schools Exclude Disabled Students From Discrimination Protections)

Oklahoma law allows donors to tuition tax credit scholarship programs to double dip, obtaining tax credits while also claiming charitable deductions on state and federal tax returns. Source: Institute on Taxation and Economy Policy

The ability to double dip — claiming tax credits and charitable deductions — allows donors making multi-year donation commitments to scholarship-granting organizations to potentially profit from their donations. Source: Institute on Taxation and Economy Policy

Scholarship-granting organizations actively advertise how donors can use the law to eliminate the associated state tax liability and even turn a profit by accepting tax credits while claiming state and federal charitable deductions.

 

Opportunity Scholarship Fund Tax Illustration Benefits

Opportunity Scholarship Fund Tax Illustration Benefits

 

Catholic Schools Opportunity Scholarship Fund

 

Sources: Oklahoma Equal Opportunity Scholarship Act, Opportunity Scholarship Fund Legislative Report, Catholic Schools Opportunity Scholarship Fund, Institute on Taxation and Economic Policy

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